Tags: Bove | Europe | US | Bank | Stocks

Bove: Europe ‘Irrelevant’ to US Bank Stocks - Buy Now

Monday, 24 Oct 2011 08:07 AM

Investors should snap up banks stocks since European debt woes won't seriously affect U.S. financial institutions as most people think, says Dick Bove, a banking analyst at Rochdale Securities.

Greece has been teetering on the edge of default and should that occur, banks holding Greek debt would be hit hard.

U.S. banks don't hold too much Greek debt but many are exposed to European banks that do, which has many worried on this side of the Atlantic Ocean that contagion from a default in Europe could spread here.

Don't worry about it, Bove says.

"Whether [German Chancellor Angela] Merkel and [French President Nicolas] Sarkozy get together or not, as far as I’m concerned, is irrelevant," Bove tells CNBC.

Dick-Bove-3-thumb-200.jpg
Dick Bove
(Rochdale file photo)
Regional banks, trust banks and national banks are going to perform especially well, Bove says, adding he wonders "why shouldn’t you be buying these stocks?"

Big banks like Bank of America, JP Morgan and Citigroup are sitting on mountains of cash while Goldman Sachs is reporting profits on an operating basis despite bottom-line losses.

To prevent the Greek crisis from getting worse, European policymakers are debating expanding the $610 billion European Financial Stability Facility (EFSF), an emergency aid fund.

Jens Weidmann, head of Bundesbank, the German Central Bank, says such a move won't do much.

"The crisis won't be resolved by permanently increasing the size of the euro zone rescue fund," Weidmann tells German newspaper Bild, as reported by Reuters.

Weidmann also says he also opposes giving the EFSF a banking license, which would essentially let it print money and avoid dealing with the crisis head on.

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Investors should snap up banks stocks since European debt woes won't seriously affect U.S. financial institutions as most people think, says Dick Bove, a banking analyst at Rochdale Securities. Greece has been teetering on the edge of default and should that occur, banks...
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2011-07-24
Monday, 24 Oct 2011 08:07 AM
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